US utility PV market to become main driver for PV sector growth

(ADPnews) - Dec 1, 2010 - Global photovoltaic (PV) companies are starting to abandon the overfed European feed-in-tariff markets and to fight for a place under the US sun, as US utilities are turning into a major driver for the development of the sector.

In its recent report "The US Utility PV Market: Demand, Players, Strategy and Project Economics Through 2015", GTM Research projects that the utility PV market in the US will reach USD 8 billion (EUR 6.1m) by 2015 from USD 1 billion currently. At present, there are 5 GW of PV power purchase agreements (PPAs) under contract until 2015 and the figure is growing with sector players from all over the world "flocking to the market en masse to take advantage".

US thin-film solar panel maker First Solar (NASDAQ:FSLR) now holds over 40% of all PPAs under development in the US, while some 22% is in the hands of domestic SunPower (NASDAQ:SPWRA, SPWRB), Sempra Generation (NYSE:SRE), LS Power and SunEdison.

"Foreign entrants like Iberdrola Renewables (MCE:IBR) and Juwi Solar, with robust PV portfolios abroad, are parlaying their experience to earn utility market share stateside," said Shayle Kann, author of the report and managing director of solar research at GTM Research. He added that PV makers such as Sharp (TYO:6753), Solyndra and GCL Solar are also looking for ways to enter the US project development market to secure new sales channels for their products.

At the same time, the tough financing environment provoked by the slow market recovery and the possible non-extension of the US Treasury cash grant pose a threat to the timely completion of solar projects. Additionally, the competitive PPA tenders result in contracts struck at untenable prices for the developers, which then rely on sharp drops in PV costs in the following years to complete their developments.

(USD 1.0 = EUR 0.770)

Choose your newsletter by Renewables Now. Join for free!